Bill tempts farmers to grow energy crops

Legislation introduced in the US Senate this week would
tempt farmers located near ethanol biorefineries to grow dedicated energy
crops.

The bill, introduced by South Dakota republican senator John Thune, would
offer incentives to farmers who plant switchgrass, fast-growing trees and other
cellulosic feedstocks and deliver them to the nation's next generation of
ethanol plants.

"For cellulosic to achieve its potential, Congress needs
to help this industry overcome some of the initial market barriers," Thune said.

"And if we are serious in the country about reducing our dependence upon
foreign oil, we have to be serious about giving the necessary jump start to
America's budding alternative fuels industry and the farmers who supply
it."

Thune said he hopes the legislation will be included in the energy
section of the farm bill, which is up for review by Congress this
year.

Huge investmentsSince February, the US
Department of Energy already awarded $585 million in grants for short and long
term projects to help companies to develop biorefeneries.

Under the new
bill the US Department of Agriculture would determine the likelihood of
construction of a future biorefinery, the local potential for feedstock
production, the number of interested farmers and a biorefinery's economic
impact.

The bill would likely fund 10 to 12 feasibility studies, each
costing about $50,000. Once a project is approved, farmers could enroll eligible
land in the program.

$45 incentiveDuring a contract's first
five years - as the ethanol plant is built and the crop is getting established -
farmers would receive a cost share and a per-acre rental payment. Once the
biorefinery starts up, the rental payment would end and the farmer would get a
matching payment of up to $45 for each ton of delivered biomass for up to two
years.

The bill would also authorize matching payments, capped at $45 per
ton, to farmers anywhere in the US who sell crop byproducts and residues such as
corn stover and wheat straw to ethanol plants.